Chapter 18.I, Problem 4TIE

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

An archery set at The Sports Authority in Mason, Ohio, has a retail price of $129.95. The sales tax in Ohio is 5%, and the federal excise tax on this type of sporting equipment is 11%. What is the amount of each tax, and what is the total purchase price of the archery set?

To determine

**To calculate:** The amount of excise tax and total purchase price of archery set when the retail price of archery set purchased by The Sports Authority is $129.95.

Explanation

**Given Information:**

The retail price of archery set purchased by The Sports Authority is $129.95 and in Ohio, the sales tax is 5%. The federal excise tax on sporting equipment is 11%.

**Formula used:**

The steps to calculate the amount of excise tax are as follows:

Step 1: Find the sales tax by multiplying selling price by the sales tax rate.

Step 2: Find the excise tax by multiplying selling price by the excise tax rate.

Step 3: Find the total purchase price by adding the selling price, sales tax and excise tax.

**Calculation:**

Consider the retail price of archery set purchased by The Sports Authority is $129.95 and in Ohio, the sales tax is 5%. The federal excise tax on sporting equipment is 11%.

The sales tax is:

Now, using the above formula, the sales tax is:

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